I have USD cash earning absolutely nothing in my USD RRSP and I came across the following 2 1/4 year corporate bond priced in USD's. So I bought $5K (minimum size). This will pay me $73 per year and will mature at PAR in April 2018, which is better than nothing.
For comparison's sake, here are 2 year USD GIC's:
The only issue I have here is the spread. TD kept 60 BPS in USD, which is disgusting, but I certainly am not going to buy 2 year USD GIC's at a whopping 45 BPS.
I look at this from the perspective of parking short term money, and earning something on the money (however small). As I continue to contribute new money to my registered accounts and I don't find new opportunities for deployment, I might as well earn something. And the icing on the cake is that for minimal credit risk, I earn 3x more on short term money vs. no risk GIC's.
I suppose the question I should really be asking is, why not buy the common yielding 4.4% (3x the bonds)? The answer is twofold, 1) I already own some BMO common in one of my accounts, and 2) valuation. I'm a buyer of BMO common under $64 Canadian. As we're trading around $77, I'm not interested in adding more.
My risk here is interest rate risk. If USD yields spike up to 3% between now and April 2018, these bonds will trade lower. As they mature at par in 2018, I'm really not that concerned.